Redpoint Raises New Growth Fund

Redpoint Ventures has raised a new $400 million fund, dubbed Redpoint Omega II, to invest in “early growth” companies.

Geoff Yang, a venture capitalist at Redpoint, said the firm closed the new fund last month after fundraising for it since mid-summer. Redpoint last raised a growth-oriented fund in 2007, with a $250 million Omega fund that year. The firm last year also closed a $400 million early-stage venture fund.

Redpoint

Geoff Yang

The new Omega fund was “nicely oversubscribed,” Yang said, adding that “we were very heartened by the reception we got for it.”

Venture-capital fundraising these days is no picnic, especially amid a new wave of stock market volatility. According to the National Venture Capital Association, venture fundraising fell to an eight-year low in the third quarter. Only 52 funds raised $1.7 billion in the third quarter, less than half the amount that was raised one year ago, said the NVCA.

Yang said the new fund is focused on a non-traditional definition of “growth” companies. Typically, growth companies refer to later-stage, more mature companies that already have their management team in place and are generating lots of revenue and have traction.

But Yang said Redpoint is focused on “early growth” companies that haven’t yet reached scale and that are evolving and still proving their business model and filling out their management team. One example of such a company is online game maker Kabam, which Redpoint invested in a few years back as it was still maturing, Yang said.

With the new fund, Yang said Redpoint will continue to focus on investing in themes such as the Internet, mobile, enterprise cloud and media-related companies.